1. Home
  2.  — 
  3. Black Lung
  4.  — Liabilities grow while the coal industry shrinks

Liabilities grow while the coal industry shrinks

On Behalf of | Jul 25, 2022 | Black Lung

The push for renewable energy continues. Most impacted is the coal industry, which continues to shrink at a rapid rate. In addition, insurance-related liabilities have skyrocketed due to a significant increase in black lung diagnoses. Estimates of the costs range from nine to 14 billion dollars, with the number likely growing over several years.

Milliman is a global actuarial and consulting firm that was the first to shine a light on the cost of existing and future black lung claims that will likely continue to grow for many years. Most come from miners plying their respective trades in Appalachia states, where coal remains plentiful.

Compensation for black lung victims

The resulting diagnoses of black lung spurred the federal government to pay a portion of pneumoconiosis claims for miners breathing in the coal dust for years, if not decades. The trust fund also assumed liabilities should a mining company close. Replacement financing would come from a tax on each ton of coal extracted from mines. However, reductions in coal consumption combined with the shuttering of many mining businesses affect the amount of money the trust fund receives.

All these factors are creating a perfect storm of financial shortcomings. Miners stricken with black lung enjoy lifetime benefits. However, continually expanding eligibility with every new black lung diagnosis is resulting in a smaller amount of financial help. In addition, more than 30 insurance carriers, including high-profile insurers, have vowed to end their associations with the fossil fuel industry resulting in new claims being covered by fewer insurance companies.

The Government Accountability Office recently announced that liabilities for the trust fund are approximately $5 billion, with projections of $15 billion by 2050. Whether that can cover all black lung claims remains uncertain.